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The Yield Curve Is Trying to Tell Us Something

(Bloomberg) Brace yourselves everybody, a recession is coming! Sometime in the next, uh, two years. Or less. Or more. Earlier this week, interest rates on 3-year Treasury notes turned higher than 5-year rates for the first time since the dawn of the previous U.S. recession, back in 2007. This is called an inversion of the yield curve, or at least a small piece of the curve. The Big One will be when 2-year and 10-year Treasury rates swap places, and bond traders are doing their darnedest to make it happen soon, as Robert Burgess points out.

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